Tag: business case

Sometimes communicating is repeating. So here we go again trying to make an argument for building business cases in advertising. (You might know that I’m a big fan of P. Drucker’s down to earth and common sense business approach.)

MEASURE IN ORDER TO MANAGE

Any business operation must be measurable. Including advertising. But I’m not talking about putting numbers on a pretty dashboard.Those actionable KPIs must always be the result of a specific business case.

A business case is a simple walk-though justification of the business objective that generated the advertising operation.

As a digital business planner you need to learn to help your clients to derive the right KPIs from their business objective. This is why it is imperative that you start by defining the right business case. (You can see an example of a business case here.)

CLEAR BUSINESS OBJECTIVES

Some business objectives are easier to measure than others. (more on business objectives here)

For instance: increasing sales, increasing the customer satisfaction can easily be supported by very simple KPIs (e.g. from 12% to 18%, etc).

However, some advertising objectives sound as if they came from a graduate level social engineering course: e.g. Changing consumer behaviour…

Whenever faced with these kinds of demands, we can always translate them into a specific business objective. Exactly how do we want to change the consumer behaviour? By how much? etc.

After analysis, you should be able to define the value to be created by the specific business objective. The business case will present a path to profitability if that business objective is attained.

EXAMPLE: A CLEAR BUSINESS OBJECTIVE

Business objective: Increase from 7% to 14% the use of a smartphone while watching TV.

Reasoning for the business case: By increasing by 100% our customers’ use of smartphones while watching TV we can increase their engagement with the brand by 10% and also the download of our custom TV watching app by 200%.
The 10% engagement increase will generate $X in customer loyalty and decrease in attrition rate by 3%, +4% social media equity and +5% in customer recommendations, etc. This will result in a cumulative revenue increase of $YM over the next 3 years.

You always need to know why you are doing a specific operation and analyze all the pertinent details.

So the conclusion to take away as an advertising planner is that you should always be able to justify your advertising initiative with a business case. And that business case has to support the business objective.